Practice Area Briefings Sponsored Content Graciously Presented by Fordharrison LLP
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Practice Area briefings sponsored content graciously presented by FordHarrison LLP Organized Labor’s International Strategy To Solve Its Domestic Crisis A look at how American labor unions are reaching out to European and other international allies to influence U.S. labor relations and how companies should respond Herbert E. Gerson and Brian J. Kurtz, FordHarrison LLP* The (Sad) State of the Unions It is no secret that the organized Public setbacks, such as corruption “Workers here in the United States labor movement in the United scandals involving unions like the and all around the world are in States is struggling. But it was not Teamsters and Laborers, as well crisis. Every day, their freedoms always this way. At its high point in as Reagan’s discharge of striking are infringed upon and their rights the late 1940s, unions represented PATCO air traffic controllers, also are trampled … [T]he world’s labor more than one out of every three hampered organized labor’s growth. movement is coming together with American workers. Subsequent The bottom line is that today a unified voice to say we will stand amendments to the National Labor 11.3 percent of American workers together to combat this troubling Relations Act (NLRA), how- are unionized, but much of that is trend and build a global movement ever, placed tighter regulations on government employment. In the that’s capable of restoring the rights unions and curtailed certain union private sector, unions represent a of workers worldwide.” activities. Employers became more scant 6.7 percent of the American — AFL-CIO President John Sweeney, sophisticated and proactive in their workforce, and that number contin- November 29, 2007 communications with employees. ues to trend downward. Leading local HR lawyers in one global group With 24% more HR lawyers ranked globally than any other legal services organization*, Ius Laboris offers local HR legal services by English speaking lawyers in 44 countries. *Source: Chambers & Partners’ guides to leading business lawyers, June 2014 www.iuslaboris.com Join us for our May 2015 Global HR Law Symposium taking place in Chicago. For more information or to register visit: www.fordharrison.com/2015globalsymposium. www.fordharrison.com ORGANIZED LABOR’S INTERNATIONAL STRATEGY TO SOLVE ITS DOMESTIC CRISIS The World Is Shrinking quartered in European countries zations prevents a U.S. employer Another major factor contribut- with substantial investment in the from lawfully establishing a works ing to organized labor’s decline in United States. The Briefing focuses council without negotiating first the U.S. is the global economy. As specifically on whether the laws with a union. the market for goods and ser- and labor climates in Germany and The UAW narrowly lost a repre- vices transitioned from domestic England can help American unions sentation election in Chattanooga to global, U.S. companies faced achieve their organizing aims at the in February 2014, but has persisted downward pressure on labor U.S. operations of companies head- in its organizing efforts and, as of costs to remain competitive. At quartered in those two countries. this publication, is reportedly close the same time, organized labor to a representation agreement with continued to push for generous Case Study No. 1: Germany VW. The UAW has been trying economic terms and inflexible “You can’t just be a national union unsuccessfully for two decades job protections. Many companies to take on a fight with these global to organize a U.S. transplant auto and their unions did not respond corporations and win unless you company. The union could not effectively to the impact of inter- build global solidarity. We have have made progress at VW without national competition, resulting in made a lot of progress there.” the direct assistance of IG Metall layoffs and plant closings in indus- — Bob King, farewell address as and the VW Works Council. A tries such as steel and auto, where UAW president, June 2, 2014 closer examination of German cor- unions were unable to backfill the The ongoing organizing cam- porate labor law sheds some light lost jobs. By the 1990s many were paign by the UAW at Volkswagen’s on how all of this came to pass in asking whether unions were still manufacturing plant in Chatta- eastern Tennessee. relevant in the U.S. Organized nooga, Tennessee, is a textbook ex- Volkswagen is headquartered labor needed a major shift in its ample of how an American union’s in Wolfsburg, Germany. German member recruitment strategy. alliances in Europe can bear fruit in corporations generally have a By the 2000s, certain segments the U.S. Volkswagen opened its first two-tiered system of board man- of the American organized labor U.S. plant in Westmoreland, Penn- agement; the management board movement struck on the idea sylvania in 1978, at a time when and the supervisory board. The that they could leverage suc- the UAW represented a significant supervisory board determines cess from the global economy. If percentage of employees working at company decisions, including corporations could be multina- the Big Three automakers and their construction or acquisition of a tional, why couldn’t unions form suppliers. According to reports, plant outside of Germany, and international alliances to level when the UAW began organizing the operations and policies of the playing field? Bob King, for- the Westmoreland employees, IG foreign plants. It makes decisions mer president of the United Auto Metall urged VW’s German board based on majority vote. German Workers (UAW) union, was one of directors to look favorably on law gives employee representa- of the first to see the benefits of those efforts. The UAW success- tives rights of co-determination forming alliances with European fully organized the Westmoreland on the supervisory board de- unions such as Germany’s IG employees, but the plant was ulti- pending on how many employees Metall. The idea is to apply lever- mately shut down in 1988. the corporation has in Germany. age “over there” through foreign Today the UAW-IG Metall alli- Because VW has more than 2,000 labor alliances to achieve results ance is pushing for UAW represen- employees in Germany, it must in the U.S. in the form of neutral- tation at VW’s Chattanooga plant reserve 50 percent of the seats on ity and card check agreements. so that the plant purportedly can its supervisory board for employ- This Practice Briefing takes an establish a German-style works ee representatives. in-depth look at how this strat- council. The NLRA’s prohibition The employee seats may be egy would work when applied to against management domination held by union representatives or multinational corporations head- or interference with labor organi- delegated to other entities such as 2 PRACTICE AREA BRIEFINGS JANUARY/FEBRUARY 2015 ORGANIZED LABOR’S INTERNATIONAL STRATEGY TO SOLVE ITS DOMESTIC CRISIS members of the company’s works Group 4 Securicor (G4S), head- UK, union actions targeting anoth- council or individual employees. quartered in England, is the world’s er employer are deemed secondary Typically, however, the greater the largest security firm and includes in nature and expose the union to unionization rate at the company, a U.S. subsidiary, The Wackenhut potential legal risks for procuring the more seats the union will hold. Corporation. The Service Employees breach of contract or interference A German company’s works coun- International Union (SEIU) is an with contract. cil cannot on its own veto or block American labor union that repre- By law, the UK union is protected a corporate decision regarding an sents employees in many segments if its actions are in furtherance of operation outside of Germany. The of the U.S. economy, including a trade dispute. The term “trade involvement of IG Metall, how- private security services.1 According dispute” is broadly defined under ever, is more problematic because to the SEIU, only 8 percent of U.S. UK labor law as: even without majority represen- security officers are represented by a tation it can leverage its desired union. In the UK, the largest general a dispute between employers and work- outcome by suggesting that it will union, GMB, represents thousands ers, or between workers and workers, conduct a wage strike somewhere of G4S employees. SEIU has a strate- which is connected with one of more in Germany unless the board votes gic alliance with GMB, with the two of the following matters (a) terms its way. This is how a German unions hoping they can raise labor and conditions of employment . union can affect labor relations in standards on both sides of the Atlan- (b) engagement or non-engagement or the U.S. or elsewhere. tic through coordinated strategies termination or suspension of employment Additionally, the UAW-IG in the areas of organizing, collective . (c) allocation of work or the duties of Metall alliance can give the UAW bargaining, and political action. employment . (d) matters of discipline a “seat at the table” at the Euro- SEIU clearly hoped its alliance with (e) the membership or non-membership pean corporate level. In 2012, GMB in the United Kingdom would of a trade union . (f) facilities for offi- IG Metall had King appointed to lead directly to membership gains cials of trade unions; and (g) machinery the supervisory board of GM’s in the U.S. To date, however, SEIU for negotiation or consultation, and other subsidiary, Adam Opel AG, and has had very little success organizing procedures, relating to any of the forego- the UAW previously held a seat on Wackenhut employees. ing matters . the Daimler-Chrysler board. All Unlike German law, UK laws do of this provides American unions not provide for codetermination A union in the UK aligned with with a blueprint for organizing by employees or their representa- a U.S.